Tuesday, December 24, 2013

Armenia cuts rate 25 bps, sees further rate cuts in 2014

Armenia's central bank cut its benchmark refinancing rate by another 25 basis points to 7.75 percent and said monetary policy would be weakened further in 2014 given the external and domestic economic developments and a further reduction in inflation.
The Central Bank of Armenia (CBA) cut its rate by 50 basis points in November, reversing a rate rise in August for a net cut in rates this year of 25 points.
Armenia's inflation rate eased to 6.6 percent in November from 7.14 percent in October, a faster decline than forecast, and the CBA said it expects inflation to reach the upper limit of the bank's inflation target range by the end of the year.
The bank expects inflation to continue to decline in coming months and return to the bank's 4.0 percent target within a 1.5 percentage point band.
Armenia's Gross Domestic Product expanded by an annual rate of 1.4 percent in the third quarter, up from 0.6 percent. Last month the central bank forecast economic growth this year of 3.4-3.8 percent, down from the government's original 6.2 percent growth forecast.
The bank's president also announced in November that the central bank would be adopting an inflation targeting policy.